The Cruising Life, by Jim Trefethen, and Cruising Financials - Page 5 - SailNet Community

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  #41  
Old 12-02-2006
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Risk

I read alright, mostly sailing magazines and submarine drawings these days though. I don't have much time for blowhards. All the Gozzards I've seen look pretty similar. You sound pretty familiar, too. But like I always say, what the heck do I know?

To get back on topic, (or maybe just to get on it, since I admit I haven't so far ) the elephant in the room is risk tolerance. Some people have it, most don't. Most people cannot stand the concept of an insecure financial future. They would never consider going cruising without insurance for themselves or for their boat, and they certainly wouldn't do it without some kind of nest egg/pension fund/cottage on the bluff waiting for their comfortable retirement. They dream of cruising long distance and may even do as Jeff H suggested, short duration trips, hopping up and down the coast, maybe participate in a Newport-Bermuda every once in awhile or something similar, but they never manage to cut the ties to shore - there's always the kid's college to think about, or the needy mother-in-law, always something, just gotta make it to 30 years for a pension and retirement medical benefits ... if they just hold on for a couple more years, everything will be perfect. Next thing they know, they're in their 60's and ocean voyaging away from the luxuries to which they've become accustomed doesn't seem so enticing. The wife needs knee surgery, he's got a bad back, and the boats been on stands in their yard for two years.

I bought my boat from that guy.

I'm in my mid-thirties, married, one boy aged 8 1/2. I make pretty good money as a technical program manager, and my wife is a teacher. I'm coming up on ten years with my company, and the stock in my 401K has doubled a couple of times since I've been investing in it. The bank, my wife and I own a small house. My cash savings isn't worth mentioning at this point. If I leave my company now, I will give up most of my pension benefits and most of the investment growth in my 401K (since most of it comes from employer matching contributions.)

We're going cruising.

We've got a plan (now about 2/5 of the way through on a projected 5 year span) and we're working to it. The ten year milestone seems to be convenient for planning, as my student loans and all other consumer debt aside from my mortgage will be paid off by then. We own the boat, the tools and most of the necessary and sundry equipment already. We're getting the boat and ourselves ready and could go sooner if circumstances required (shipbuilding is a notoriously uncertain career, particularly in this era of constant downsizing.)

Will we have health insurance? Maybe not. Boat insurance? Probably not. A cruising kitty capable of providing 50K a year in income from investment return alone? No way. But we're young, skilled, intelligent, and willing to work. Like the young nurse who commented easrlier in the thread, we have portable skills. More importantly, we have confidence in our ability to make money, one way or another, along the way. We are risk tolerant, partly becasue we are young, but also inherently. With some work and effort, and a bit of luck, this will get us cruising before we're 40.

After all, what's the worst that can happen, that we've got to come back and get real jobs? (OK, not the worst, but disability, illness & injury can strike anyone, anywhere, anytime. Might as well get some cruising in before that happens.)
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  #42  
Old 12-02-2006
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"Reading isn't what you best is it?"

Apparently writing isn't your best either!!
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  #43  
Old 12-02-2006
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MorganMike,

Sounds like you have a viable, realistic plan. I don't think I will dive in to the extent you are planning, but I retired last week. The boat is wet stored for the winter, in Annapolis. In the spring we will get her ready to cruise New England for the summer. We plan to spend next winter in the Abacos. No plans to take off forever, but we are looking forward to some extended cruising.

I will be watching this list for hints and tips as well as information on the areas we will visit.
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  #44  
Old 12-02-2006
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Excellent points MorganMike. Too often, for one reason or another, someday never comes. I retired early, have already gone through most of the money I expected to last for 5 years, and don't have one regret about doing it. If I have to stop for awhile and work, so be it. I'm doing what I want to do, and on my terms. Don't think one can ask for more than that.
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  #45  
Old 12-02-2006
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Quote:
Originally Posted by morganmike
After all, what's the worst that can happen, that we've got to come back and get real jobs? (OK, not the worst, but disability, illness & injury can strike anyone, anywhere, anytime. Might as well get some cruising in before that happens.)
Great post, Morganmike. We wish you the best with your plans. I think what you are planning is very doable.

If you look around the web, you find others with similar plans who are either just about to go, are cruising, or who are back from cruising. There's good stories and not-so-good stories. The one thing I'm learning from their tales is that expensive and complicated breakdowns sound more like the norm than the exception, even if the systems soaked up months or years of work and investment in advance. Until you've motored 1,000 miles, for example, it's hard to tell how your engine and drive train will hold up.

I still really like the Herb Payson books, starting with his first called Blown Away. He and his family started in what seems like a different era, the 1970s, but they had an excellent attitude. They sailed a wooden boat with a frustrating engine on a very low budget with kids for a lot of adventures. I really think a cruise with a brand new boat with perfect systems can fail if the attitude is wrong, and a cruise with less-than-perfect everything can succeed fantastically with the right attitude and previous experience. (Caveat: I think it's pretty rare for attitude to overcome inexperience with cruising or boat maintenance, but...).

On the "worst that can happen list," one of the most frightening for me is health insurance. If you sail with no health insurance, can that be unfair to one's extended family? Both my wife and I come from large families, and if we got into a serious/expensive health issue with no insurance then they would feel the need to contribute. Even if we successfully rejected the help, it would be a real strain on everyone. In reading the SSCA and other forums about cruising health care insurance, especially coverage for only extreme and expensive needs, I think it could be worth the cost to prevent the "worst case" from occurring.

Good luck, and have a great time both now and in the future. Right now, I'm going to try and rouse the family into a daysail with me, even though it's only 36 degrees outside at the moment...

Jim H
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  #46  
Old 12-02-2006
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Quote:
Originally Posted by Jim H
Most of us know how to use the IGNORE LIST feature on this bulletin board. Basically, in the User Control Panel, we can add a user to our personal ignore lists, and then it's pretty much like they don't exist.
Phew! Thank you Jim. I was unaware of the ignore list until you pointed it out. He is now ignored, and I can get on with reading this thread without having to read the pitiful diatribes of this embarrassment to my country making a public a** of himself. I apologize for him; his simplistic attitude and twisted opinions are not shared.
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  #47  
Old 12-02-2006
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No need to apologize dawndreamer, they are everywhere. One thing that has been going around in my head though is what you would be doing to need $50k a year to cruise. Shoot, with that much, I could put 35 a year into the boat! And that's more than I paid for it.

Point is, that seems like a lot of money to go cruising, unless you're just going somewhere to tie up in a marina and live a shore type life. Nothing wrong with that, but I found one of the nice things while I was out was not worrying about how much money I spent, because I wasn't anywhere to spend any. I looked forward to finding a nice anchorage in the evening, and even the one's I shared with others, were still peaceful and relaxing.

It seems to me, at this point, that the biggest strain on the kitty is the periodic costs, such as maintaince, insurance, etc. The day to day costs are minimal when not using marinas each night. Though, if you are outside US waters, there are often cruising fees in many places.

I've started looking at my kitty as a two part thing. One for periodic costs, and one for day to day. That way, once you've established a good reserve for those periodic costs, the amount needed to actually cruise is much smaller. And since you won't always use all the reserve usually, it becomes much easier to refill it. That way, rather than thinking I need X number of dollars of return on my investments, I can probably do alright with Y. Then if I get X, I'm money ahead.

As a disclaimer of sorts, I have to say I've never been one to have a bunch of money in the bank. And I have no one but myself to be concerned about. So there isn't as much "risk" involved for me, as there would be for a couple or a family. But I do think the basic principal would still apply.
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Full, is the spirit, that thinks not, of falling.
True, is the soul, that hesitates not, to give.
Alive, is the one, that believes, in love.
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Last edited by PBzeer; 12-02-2006 at 08:15 PM.
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  #48  
Old 12-02-2006
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Quote:
Originally Posted by PBzeer
Excellent points MorganMike. Too often, for one reason or another, someday never comes. I retired early, have already gone through most of the money I expected to last for 5 years, and don't have one regret about doing it. If I have to stop for awhile and work, so be it. I'm doing what I want to do, and on my terms. Don't think one can ask for more than that.
Well said PBeezer! Who cares if you have to work some in new places, whether a new state, or a new country, it's just another experience, just another adventure. I find it interesting to find and learn new skills outside of my career. Just recently had a job offer to help build 49 foot ocean cats for a small local builder that puts out about seven to eight boats a year. When I have the time I plan on going down there a few days a week and helping out. This job just fell into my lap, I saw a big cat 49ft with the mast stepped on a trailer at a small local boat ramp (is this real?)and just stopped to see the fireworks and ended up helping out some. I don't think it would be to hard to make the little money needed for cruising if you run out, and the country allows it, which is probably the hardest part. If you are retired, it would be great to have enough money to not have to worry about it though.

I like what I read earlier about the smallest, cheapest boat you can live on,and K.I.S.S. People were cruising long before all of these gadgets. The less you have the less time you spend working on complex systems and maintanence. I know it's extreme, but look at the Pardeys, without an engine, think of all the money and maint. they saved, and although I wouldn't go without an engine, you have to look at it as another adventure, not a disadvantage. Brandon
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  #49  
Old 12-02-2006
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Quote:
Originally Posted by PBzeer
No need to apologize dawndreamer, they are everywhere. One thing that has been going around in my head though is what you would be doing to need $50k a year to cruise.
Thanks John. $50k a year certainly seems excessive to me. Our average monthly expenses during our six years of cruising the French canals were under $1800 Canadian, and that included moorage, insurance, maintenance, fuel, daily bottles of wine and wonderful fresh produce, as well as dining-out every few days.

With my new boat, as a term deposit earning 4%, my cruising kitty will give me CA$2,500 per month. This should be more than ample, particularly since the boat will be on warranty, and will require fewer repair dollars from my own wallet for the first two or three years. I anticipate that the kitty will grow. When my old age security and CPP pensions kick-in, they will add CA$1,600 per month to the pot and bring the annual income to nearly CA$50,000. The boat will be a bit older then, nearing the end of its warranty and will likely require a bigger repair/maintenance budget; however, I don't think that I will be able to use the entire income, and the kitty will continue to grow. This should give me a nice nest egg to come ashore with if/when I become tired/incapable of cruising.
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  #50  
Old 12-02-2006
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As I read these threads with the theme "go now...go small...but go" I think about all the cruising couples we've come in contact with over the last few years and it seems to me that the vast majority of the boats that I will call "campers" have packed it in. Some because the money ran out, some because it wasn't fun anymore and some because one of the two said "enough".
Living on a small boat at anchor for extended periods of time requires a LOT of adjustment and most couples are not up to it. It is tough enough on a larger boat. Interestingly, I see a lot of single guys on small boats that have been doing it for a while and seem happy enough.

OK...I'll get to my point. If you are considering living aboard and cruising, it is easy for the dream to obscure the reality. I think you have to be very realistic about what level of comfort and inconvenience you can put up with for years on end. If you are not honest about this with yourself, you will end up unhappy and with a short cruise. There is a huge difference for a couple living aobrd a 40+ foot boat with complete systems and going off on a 30 footer. It costs a lot more to buy AND live aboard the larger boat so that means delaying cruising or adjusting the duration planned if 40'+ is what will work for you.
None of this is to say "don't go small"... just be sure you BOTH can handle it. I do subscribe to the theory of GO as soon as you are able to do it in the manner which will make you happy!
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